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Whistleblowing, stemming from the phrase “blowing on a whistle”, is a term mostly known and used mainly in Western countries. Currently, however, as a result of the new European regulation, this institute is also being introduced into the Czech environment.
This is a significant change that has the chance to notably transform existing habits and interactions within the work environment.
In short, whistleblowing can be described as an activity, or rather the opportunity for employees to report certain illegal or unethical behaviour that they learned about during the performance of their work. That is, without fear that any retaliatory actions would be taken against them by superiors or colleagues as a result of such a notification.
In our e-book, we summarize the basic terms related to the topic of whistleblowing and the main points of the newly introduced legislation, including a comparison of the Czech law with the literal wording of the European directive. All this in a comprehensible way and with practical examples the Czech environment.
For a better understanding of the information presented in this e-book, we included an overview and explanation of the most commonly used terms related to the issue of whistleblowing at the beginning. Since the majority of the interpretation will relate directly to specific legislation, most of the terms below are explained using their statutory definition. However, the definitions contained in the legal regulation are sometimes simplified for the reader’s comfort.
A Report is a notification by a natural person (“Whistleblower”) containing information about a possible illegal act that has the characteristics of a criminal offense, a misdemeanor (with a possible fine of at least CZK 100,000) or otherwise violates a legal regulation (especially some regulations of the European Union), the commission of which became known to the reporting person in connection with work (or similar activity). It is precisely the Report from which the concept of blowing the whistle is derived, i.e. a reaction intended to draw attention to certain objectionable behavior. We then comment on the Report and its requirements in more detail in Chapter 5.
Retaliatory action or Retaliatory measure (we use both terms in the manual) means actions in connection with the work (or similar activity) of the Whistleblower, which was triggered by the Report, and which may cause harm to the Whistleblower or a Related Person. Under Retaliatory action, the reader can imagine, for example, a termination by the employer that came as a result of the Report of objectionable behavior by a superior. More on Retaliatory Actions, its examples and Related Person in Chapter 6.
Obligated Entity means a person (natural or legal) who is obliged to establish an Internal Reporting System, to designate a Responsible Person and is obliged to undertake other tasks. We provide a complete list of Obligated Entities in Chapter 7, however due to its scope, it can be simplified so that the obligated entity is any employer with more than 50 employees. The number is specified in relation to the European regulation by the Czech Implementing Act No. 171/2023 Coll., on the protection of whistleblowers (hereinafter “the Act”)
The External Reporting System is one of the two main ways in which Whistleblowers can make individual Reports. The establishment of the External Reporting System (a single, central) is the responsibility of the Ministry of Justice (“the Ministry”). This system is intended to serve as an alternative to the Internal Reporting Systems, in particular for in the event of non-establishment by the Obligated Entities. Details of the External Reporting System in Chapter 8.
Internal Reporting Systems are one of the two main ways in which Whistleblowers can make individual Reports. The establishment of an Internal Notification System is then a fundamental obligation of each Obligated Entity. In simple terms, it is a list of measures, that virtually every large (50+ employees) employer must adopt and that serve for the submission, assessment and recording of Reports. This obligation is discussed in more detail in Chapter 8.
A Responsible Person is a natural person who meets the conditions of integrity, maturity and full legal capacity, who has been designated by the Obliged Entity for the purpose of fulfilling certain obligations. These include, in particular, receiving and assessing the validity of Reports submitted under the Internal Reporting System, as well as proposing measures to remedy or prevent an unlawful situation following such Reports. The designation of the Competent Person is, together with the implementation of the Internal Notification System, the main obligation of the Obligated Entities. For more information on the Responsible Persons and their obligations, see Chapter 8.
As we have already indicated, the new obligations to which this e-book is dedicated result from the legislation of the European Union. Specifically, this is the Directive of 23 October 2019 (on the protection of persons who report violations of Union law) (hereinafter referred to as the “Directive”). Like any other, this Directive should have been incorporated into the legal systems of individual member countries within the relevant period. The Czech Republic, as well as other member states, should have adjusted their legal and administrative regulations so that they were fully in line with the provisions of the Directive. However, the deadline expired on December 17, 2021, and the Directive was not implemented on that date.
Legislators tried to adopt a law that would incorporate the Directive into Czech law already in the first half of 2021, but their proposal was rejected in May 2021.
Their next attempt, i.e. the second draft of the Act to implement the Directive, got stuck in the committees of the Chamber of Deputies for a long time during the adoption process.
Although the Act enjoyed general agreement across the political spectrum, it was not adopted until
June 7, 2023, almost a year and a half after the transposition deadline had passed in vain.
However, the lack of activity on the part of the Member States in implementing EU legislation has not been without consequences. The European Union is equipped against such inaction by the institution of the so-called direct effect of directives. Under certain conditions (which are fully met in the case of the Directive in question), the legislation becomes applicable even without being implemented/compiled into the legal system of the Member State. In practice, this EU safeguard means that, despite the lack of transposition, the Directive was binding on certain entities. Thus, with effect from 18 December 2021, the Directive and the obligations arising from it applied to public entities, i.e. state authorities, local and regional authorities and other public institutions such as the General Health Insurance Fund, public universities and others.
In contrast, private law entities (ordinary employers) cannot be punished for lack of consistent implementation by the state and can generally wait until the relevant national law has been passed to comply with the new obligations. This was incorporated into the domestic legal system in June 2023 under the number 171/2023, the Whistleblower Protection Act. The obligations set out in the Act have a double effective date: depending on the size of the Obligated Entity, this is 1 August 2023 (larger employers with 250 or more employees) or 15 December 2023 (smaller employers with 50 to 249 employees). On these dates, the Obligated Entities’ bylaws and processes will need to correspond with those rules described below.
There are many different perspectives in assessing the actions of Whistleblowers in detecting, reporting, and then addressing illegitimate, unethical, or illegal practices based on that complaint. However, there are only two main points of view. The first view is that whistleblowing is informing or snitching behavior that should be viewed negatively. The Czech Republic in particular has historically been one of the countries where this interpretation has prevailed in most places until recently. It is only with the passage of time that domestic thinking on the issue of whistleblowing is moving closer to the Western one, especially as a result of the influence of the European Union. The second, more modern perspective sees whistleblowing as an unambiguously positive process, an important tool in the fight against faulty behavior in the workplace.
Although the subject is most often mentioned in connection with corruption, whistleblowing is useful not only for uncovering property and financial crime, but also for eradicating sexual harassment or other forms of bullying of subordinates, for example. Although whistleblowing is generally associated with moral wrongdoing, not necessarily illegal, domestic and European legislators focused only on behavior that is not in accordance with legal regulations.
As with the choice of types of behavior to be targeted by the legislation, the drafters of the Act had a choice from a number of options when choosing the ways in which whistleblowing would be carried out. One of the options offered was the so-called corporate whistleblowing. In this procedure, an employee (or a person in a similar position) within a particular company draws attention to faulty behavior of their colleagues, subordinates and superiors. In addition to this procedure, public law whistleblowing can also be distinguished, which takes place in all conceivable components of the state administration, state bodies and public institutions. It also applies here that the Whistleblower can be a member or employee of the given institution, but also another person who is in a certain relationship with the concerned organization and its members.
Within both of these types, there are subtypes, most often called internal and external whistleblowing. As the name suggests, the purpose of internal reporting is to communicate the Report to a person specially authorized to do so within the given company or institution, whereas with external reporting, the Report is communicated to a third party. Such a third party is then most often the police, the public prosecutor, but also, for example, the media or various private organizations dealing with the issue in question.
The above interpretation can be summarized in several key principles:
This policy is that Reporting under the Act is only subject to conduct that is not in accordance with the legal regulations. By legal regulations we mean mainly domestic criminal law and administrative law, as well as some European regulations, the list of which we provide in Chapter 5. However, this principle cannot be understood to prevent private Obligated Entities from extending the programs and measures provided to employees to report to a variety of unethical or anti-internal conduct. Thus, the principle of legality represents only a bare minimum of reportable conduct required by the Act.
This policy specifies that the legislators have decided to allow the Whistleblowers the widest possible options in terms of reporting methods. This is manifested at a lower level by the fact that the Act stipulates the obligation to introduce both Internal Reporting Systems and External Reporting Systems. The Whistleblower therefore has the option of choosing where to send his Report. Internal Reporting Systems are set up by individual employers, while the external one is set up by the Ministry. At a higher level, it is the fact that protection is provided for both private employers (especially business corporations) and public entities (for example, ministries and administrative authorities).
The previous principle is closely related to the principle of informality. In a similar spirit, i.e. in an effort to facilitate the position of Whistleblowers, the legislator sets very low requirements for the form of Report. It does so by requiring the Obligated Entity to accept Reports in writing, orally or even by means of a personal meeting (specifically at Whistleblower’s request).
Under this principle, it would also be possible to subsume the principle of anonymity, on the basis of which, as the name suggests, the Obligated Entities would be obliged to accept even Reports that do not contain the identification of the Whistleblower. However, the possibility of anonymous Reports was removed from the original draft of the Act during the legislative process.
This principle consists in the obligation to take such measures to ensure that the Obligated Entities keep sufficiently secure records of sensitive information, whether it is the identity of the Whistleblower or the specification of the alleged violation. The purpose is then to limit the negative impact of whistleblowing on all persons involved.
The above principles, which are based on the newly adopted Act and the European Directive, should be kept in mind when exercising rights and fulfilling obligations regarding whistleblowing. This of course applies to both parties, both Whistleblowers and Obligated Entities. Failure to comply with the obligations could ultimately lead to the commission of an offence, which we discuss in more detail below in Chapter 9
As mentioned in Chapter 2, the Act was absent in the Czech Republic for a long time, it was only adopted in June 2023, while its effectiveness was set for August 1, or December 15, 2023. However, on the basis of the direct effect of the European Directive, some entities were already obliged to apply and implement the regulation in question. In order to clarify the situation and to inform the concerned public entities, the Ministry has created a Methodology for the direct applicability of the Directive. An outline of its key points is provided below. These include especially a list of entities that have been subject to the Directive in the past as a result of its direct effect and a list of their main obligations. It is worth repeating at this point that the same obligations will now apply to private entities but will only apply to them from the entry into force of the adopted Act.
State authorities
Authorities of territorial self-governing units
Other public institutions
Establish an effective Internal Reporting System (to receive oral and written Reports)
Designate the Responsible Person
Publish information on the methods of reporting and on the Responsible Person on the website
Ensure that the elected Responsible Person is instructed in all their duties and that they fulfill their duties properly and on time
Take appropriate measures to correct or prevent an unlawful condition following a Report
As already mentioned above, the obligations for public and private entities are almost identical under the currently partially effective Directive and under the introduced Act. In Chapter 8 we therefore provide a more complete and detailed list of the tasks that Obligated Entities are obliged to perform under the Act.
At this point, it is also appropriate to draw attention to the difference between Internal Reporting Systems, which, like any other employer, are implemented by public (especially state) entities, and the External Reporting System, which is only one and is in the charge of the Ministry. As the direct effect of the Directive also applies to the Ministry, it was obliged to introduce this External Reporting System as early as December 18, 2021. They have fulfilled their commitment, and we describe their central system as it operates today in Chapter 10.
In short, the Report can be understood as a submission of information about an unlawful act. However, a number of questions arise in this context, such as: who can report, what form of reporting is required, to whom to report, which acts can be reported and which cannot be reported. These and other issues will be discussed in Chapters Error! Reference source not found. to 8.
Report means a notification of a natural person containing information about a possible illegal act that has the characteristics of a criminal offence, offence (with a possible fine of at least CZK 100,000) or otherwise violates a legal regulation (the Act itself or domestic and EU regulations governing selected areas), the commission of which has come to the attention of the Whistleblower in connection with work or other similar activity.
As can be seen from the above legal definition, the Report must meet several conditions which must all be met at the same time.
First, the information must be provided by a natural person. This is a person without distinction, but not a company, cooperative, association or other entity; these are legal persons. Given the purpose of the whistleblowing regime, the restriction to natural persons is understandable and this feature of the definition therefore poses no problems.
Second, it must be conduct of which the Whistleblower has become aware in connection with their work or other similar activity. Since the term work is defined in several places in the Czech legal system, and in different ways, the Act contains its own definition:
Work or other similar activity means:
Work or other similar activity also means applying for a job or other similar activity.
It is evident that the list is indeed exhaustive and, in accordance with the principle of extended protection mentioned above, the purpose is to protect the interests of the Whistleblowers to the maximum extent possible, whatever their activities in whatever area and under whatever regime.
The last essential feature of the Report is the illegality of the reported conduct. Infringing conduct should meet the characteristics of a felony or misdemeanor for which the law provides a fine of at least CZK 100,000.
In addition to these two main, general groups of offences, protection is also provided in the following specific sectors. It is possible to report breaches of both domestic and EU legislation governing the following areas:
Only if the three elements (natural person, work-relatedness, qualified unlawfulness of the act) are met simultaneously, the submission of information is considered a Report within the meaning of the Act.
In addition, however, there are certain facts that may not be considered a Report even if the above conditions are met. In particular, these are:
Similarly, it is necessary to bear in mind the obligation of confidentiality of certain persons in specific positions. It goes in particular the obligation:
As to the ways in which individual Reports may be submitted, they can be summarised as follows. The notifier can communicate information through the Internal Reporting System (which we outline in Chapter 8 as the main task of the Obligated Private and Public Bodies) or through the External Reporting System (which is the responsibility of the Ministry, see Chapter 10). If none of these options leads to a satisfactory result, or if there is a serious case of illegality, then the Whistleblower may make the information in question Public (i.e. disclose it e.g. by mass media).
Although we try to present the topic as clearly as possible, it is obvious that the regulation of whistleblowing is not the easiest in terms of the complexity of the regulation. This may also raise the question of why the persons involved are subjected to such complex and detailed rules. The answer is simple – it is the Retaliatory Actions, or rather the effort to prevent such situations.
Retaliatory action means an action in connection with the work or other similar activity of the Whistleblower that is triggered by the Report and that may cause the Whistleblower or a “Related” Person to cause harm.
The Act then provides an illustrative list of Retaliatory Actions that may commonly occur as a result of the Report. However, in addition to the situations listed below, other conduct may also be considered a Retaliatory Action, if the above definition is met.
As can be seen from the legal definition, in addition to the Whistleblower itself, other persons for whom the term Related Persons may be used are also protected. These are also the ones that the Obliged Entities must, according to the Act, protect from Retaliatory Actions. Specifically, these are:
Neither the Whistleblower nor the Related Persons can waive the protection against Retaliatory Actions. Whether this would be, for example, by a unilateral declaration or even by a bilateral or multilateral agreement, none of these acts would have any effect in practice. However, protection is of course not afforded to persons if they make a knowingly false Report. In such a situation, on the contrary, the offence described in Chapter 9 may be committed. Similarly, protection is not inherently afforded in situations where the Report is an anonymous Notice, lacking the identification of the Whistleblower, as one of the mandatory requirements.
If the protected persons suffer immaterial damage as a result of the Retaliatory Action, they have the right to adequate compensation, in simple terms, compensation for their hardship. According to the general provisions of the Civil Code, this must be granted in money if no other means can provide genuine and sufficiently effective compensation for the harm caused. The Civil Code also provides for compensation for damage to property, for which no special derogation is made in the Act.
As we already indicated in Chapter 44, some subjects (primarily state) were obliged to fulfill the tasks arising from the Directive earlier, as a result of its direct effect. At this point, however, we will also focus on all those other entities that have an obligation based on the newly adopted Act. According to this regulation, the following entities are obliged:
At first glance, it is obvious that the list is very extensive. However, the most important provision of this paragraph is undoubtedly (b). According to the Act, the obligations in question apply to all employers with at least 50 employees. This number is fully in line with the wording of the European Directive which the Act implements.
At this point, we would like to mention that the original draft of the Act was much stricter with regard to Obligated Entities than the implemented Directive. The legislative proposal foresaw the regulation of all employers with at least 25 employees. However, this provision has been the target of strong public criticism, as the range of entities to which the introduced obligations, with considerable administrative costs, would apply would be significantly increased.
Although the Act was passed in a noticeably lighter version, it is still clear that the obligations will apply to a really large number of people. There is no limitation to a specific trade or business area for entities under (b), and compliance with the 50-employee condition is not uncommon among Czech employers today. Therefore, in the following Chapter we present in detail the innovations that the Obliged Entities must now introduce in their operations.
Just like the list of Obliged Entities, the list of their obligations is not exactly the shortest. For the sake of clarity, we divide the individual tasks into several groups. However, it should be kept in mind that the individual duties are interrelated and that a single breach or deficiency in the system can result in a breach of more than one legal obligation.
The implementation of the Internal Reporting System is a key obligation of the entities concerned. It is one of the means by which Whistleblowers can communicate individual Reports. In addition to the Internal System, a distinction should be made between the External System, which is the responsibility of the Ministry, and the institute of Publishing Reports as a kind of emergency measure. Both of these instruments are discussed in Chapter 10. The main purpose of the Internal Reporting System is to enable a Whistleblower to submit a Report (in writing, orally and, on request, in person) within the employer’s structure. In line with the principle of informality, mentioned in Chapter 3, as few requirements as possible are placed on the form of the Report.
The implementation of the Internal Reporting System is not necessarily up to the Obligated Entities themselves. In fact, the law provides an explicit possibility to entrust the implementation of the system to a third party. However, this does not relieve the employers of their responsibility for the fulfilment of the defined obligations and for any possible offences. A similar procedure is applied to relatively smaller employers, i.e. those who exceed the threshold of 50 employees but do not have more than 249 employees. These may share Internal Reporting Systems or simply use the system of one of the Obligated Entities. This option is, of course, subject to the mutual agreement of these parties.
The third party that implements the Internal System for the Obligated Entity (in practice this will be mainly compliance specialists or software companies offering electronic solutions), as the person with whom the Obligated Entity shares the system, should always be distinguished from the Responsible Person. This is because the Responsible Person is not the optional third party implementing or sharing the system, but the person legally obliged to carry out activities within the system, such as receiving or assessing Reports. This person will normally be a central part of any Internal Reporting System.
The functioning of the Internal System is closely linked to the Obligated Entity’s obligation to prevent the Notifier or a “Related Person” from being exposed to a Retaliatory Action. Failure to comply with such an obligation may result in one of the offences addressed in detail in Chapter 9.
All Obligated Entities are required to designate a Responsible Person as the central point of the Internal Reporting System. Due to the nature of this position and the requirements of honesty and confidentiality of the individual in question, the Act foresees certain conditions that the Responsible Person will have to meet:
Most of these conditions do not require any further explanation, but for the integrity, the legislator envisages its own definition. The requirement is not met by (i) persons who have been convicted of criminal offences committed in connection with the performance of work or similar activity, (ii) persons who have been convicted of intentional offences with a maximum penalty of more than 2 years, and (iii) persons who have been convicted of certain offences listed in Chapter 9 within the last 5 years. Integrity is certified by an extract from the Criminal Record, which is no older than 3 months.
In the event that the Responsible Person ceases to comply with this condition, they shall immediately notify the Obligated Entity of such fact. If the Obligated Entity becomes aware that the Responsible Person no longer fulfils the requirements for the performance of that function, whether in terms of integrity or any other condition, and whether it becomes aware of such information in the course of its own activities or directly from the Responsible Person, it shall replace the Responsible Person. The appointment of a new Responsible Person shall not in itself affect the continuation of the employment relationship of the employee (the original Responsible Person), in particular if such employee is performing work other than the performance of duties in relation to the protection of Whistleblowers. This phenomenon can be very common in practice, so it should be kept in mind that if, for example, a compliance professional who is also designated as a Responsible Person ceases to meet any of the requirements of a Responsible Person under the Act, this does not automatically mean that their employment relationship is terminated. Of course, it cannot be ruled out that in connection with the breach of the Responsible Person condition, a breach of a certain employment obligation has also occurred, as a result of which the employment relationship could theoretically be terminated. However, these two phenomena, i.e. the obligations and the possible breach thereof, are entirely separate and can exist independently of each other.
As the subject through which the entire Internal Reporting System operates, the Responsible Persons have a number of important responsibilities. It is their description that provides insight into how the actual reporting and following up will be conducted. In particular, it is the obligation to:
As for the specific course of action following the submission of the Report, the Act foresees the following course of action:
All notification made to the Whistleblower, most often by the Competent Person with whom the Whistleblower will be in contact, must be made in writing. This is to ensure that the Whistleblower is able to demonstrate, that a notification has been made and how it has been dealt with subsequently.
For the proper use of the Internal System, its creation by the Obliged Entity is not sufficient. Thus, in order to spread awareness of such possibility of disclosing sensitive information, especially among the ranks of employees, the legislator provides for the obligation of the Obligated Entity or a third party that has been entrusted with the implementation of the system to publish certain information on the website of the entity. This includes information on the possible means of Reporting, the identification of the Responsible Person, their telephone number and email or other address for delivery. In addition, the purpose of the regulation already implies the obligation to create certain material conditions for the performance of the activities of the Responsible Person, as well as to properly instruct them on the rights and obligations associated with this important position.
Provided that the conditions imposed on the Report are met, these communications will normally contain highly sensitive information. Obligated Entities (or, where applicable, authorised third parties) are therefore obliged to ensure that only the Responsible Person can see the Report submitted and that the prohibition on disclosure of certain information is respected. In particular, the identity of the Whistleblower and “Related Persons” and any information that could defeat or compromise the purpose of the Report are protected. This definition is not entirely detailed and its flexibility is intended to ensure that it can be used for specific circumstances of each case.
In addition to keeping the information confidential, the Responsible Person is also obliged to properly store the information. In electronic form, they shall record:
Of course, it is possible that some of this information may not be available in a particular case. However, in such situations, the Responsible Person may not necessarily require the missing information from the Whistleblower and will be satisfied with recording the known information. In the case of oral Reports, an audio recording will be made with the consent of the Whistleblower. The records shall be kept for a period of 5 years and, in accordance with the principle of integrity and confidentiality, shall be accessible only to the Responsible Person, or, if necessary, the law enforcement authorities.
You can find the diagram for creating an Internal Reporting System in the eBook.
It is evident from the interpretation of the last Chapters that the Act introduces a number of new obligations, not only for employers as Obligated Entities, but also for other parties. In simplified terms, the obligations and prohibitions can be divided into three main groups, on the basis of which a distinction can then be made:
The only possible offence of the Whistleblowers is the submission of a knowingly false Report. Not only is there no protection for such a disclosure, but in addition, such conduct can be fined up to CZK 50 000. Beyond the Directive and the Act, however, it is also necessary to draw attention to the existing legal framework – in certain circumstances such a false report could be considered a criminal offence of false accusation under section 345 of the Criminal Code.
If the Responsible Person does not refuse to accept the Report, but then fails to inform the Whistleblower of the outcome of its assessment within the specified time limits, they commit an offence with penalties of up to CZK 20 000.
In Chapter 3 we already mentioned the principle of integrity and confidentiality as one of the main principles of the intended regulation. It is therefore not surprising that the legislator has made it an offence to provide information that could obstruct or undermine the purpose of the Report, as well as to provide information about the identity of the Whistleblower without his written consent. This offence, which in practice could theoretically lead to an unwanted proliferation of Retaliatory Actions, is punishable by a fine of up to CZK 50,000, or up to CZK 100,000 in cases where the offence was committed intentionally, i.e. up to CZK 100,000 in those cases where the commission was committed intentionally.
As noted in Chapters 1 and 8, there are certain requirements placed on the Responsible Person that will ensure that only individuals with a sufficient degree of trustworthiness perform the function. One of these is the integrity of such a person. The legislator thus fines up to CZK 20,000 those who fail to report a breach of this condition, i.e. loss of integrity.
The common consequence of all offenses of this group is the fact that the Relevant Person loses his integrity for a period of 5 years by committing them. This indirectly prevents the perpetrators from performing the relevant person’s activities in the future. With this measure, the legislator pursues the already mentioned intention that the protection of Whistleblowers is carried out exclusively by trustworthy persons with sufficient moral guarantees.
For the sake of clarity, offenses committed by Obliged entities can be classified into two groups depending on their severity. These are:
It follows logically that the penalties for more serious offences are more severe for the offender. For offences in the group of minor offences, a fine of up to CZK 400,000 may be imposed. For the major ones Obligated Entities will pay a fine of up to CZK 1,000,000.
In addition to the main groups of offences, there is a fourth group, referred to as other offences. These can be committed by any person, regardless of their status. Thus, for example, an offence is committed by a person who prevents the Whistleblower from submitting a Report, or by a person who, against the Whistleblower’s will, provides information about the Whistleblower’s identity or other information that would defeat or jeopardise the purpose of the Report. For such an offence, all persons are liable to a fine of up to CZK 100,000 (for obstruction of the Report) or CZK 80,000 (for disclosure of information).
The last, but judging by the amount of the fines, very significant, residual offence is the exposure of the Whistleblower or Related Person to a Retaliatory Action. For this act, which goes directly against the whole purpose of the legislation, natural and legal persons face fines of up to CZK 1,000,000. The punishable offence here is the active exposure to Retaliatory Action. However, as already mentioned, in the case of Obligated Entities, passivity can also be sanctioned with the same fine – employers are obliged to explicitly prevent and discourage Retaliatory Actions.
Depending on the offence in question, the Ministry, the regional labour inspectorate, or the State Labour Inspection Office, if it has been detected during its inspection activities, is competent to deal with the offence. Accace will be happy to provide its services to assist or represent you directly in these proceedings.
The Internal Reporting System, which has been the subject of the majority of this Guide, is only one of the ways in which Whistleblowers can submit their Reports. We have already indicated in Chapters 1 or 5 that in addition to the internal system, which, simply put, is created by all employers with 50 or more employees, there is an external system.
The creation of the External (“outer”) Reporting System is then the responsibility of the Ministry. Since the Ministry is a public body, it is subject to the direct effect of the Directive, which we have detailed in Chapters 2 and 4. Thus, in addition to providing methodological, advisory and professional assistance in matters of whistleblower protection, the Ministry was obliged to establish a central system for receiving and assessing Reports, whether oral, written or in person, as early as December 2021.
The Ministry did not wait for the adoption of the Act and has been fulfilling its obligations for many months, as is evident, among other things, from the introduction of the External Reporting System, which is available from Whistleblower – The Ministry of Justice In order to clarify the procedure, the Ministry has created the diagram that can be found in the eBook.
The possibility to file a Report through the Ministry may increase the frequency of reporting by Whistleblowers who, for various reasons, avoid the possibility of filing directly with law enforcement authorities (police or prosecutors) or other relevant public authorities. One reason may be that potential whistleblowers fear a negative reaction if they are unsure of the social harmfulness of the reported conduct and its legal qualification. In the event that a potential Whistleblower is unsure whether the facts they have identified constitute an infringement within the meaning of the Act or the Directive, the Ministry is obliged to assist by providing expert advice.
Whistleblowers may also choose to file a Report with the Ministry if the Internal Reporting Systems of their Obligated Entities are not functional or, for example, if they do not have sufficient confidence in them. Of course, Whistleblowers do not have to state the reason for preferring the External Reporting System, nor are they obliged to submit the Report first through the internal system. The central system thus acts as a fully functional alternative.
Although the legislation provides for the above-described safeguard in the form of the External Reporting System, the legislator decided to ensure the protection of Whistleblowers in another way. As we have already indicated in Chapter 5, under certain conditions, information about a defective act can be shared completely outside the whistleblowing systems. The law uses the term Public Disclosure to refer to this process. A whistleblower can make the information forming the content of the Report public if:
If at least one of the above conditions is met, it is left to the Whistleblower’s discretion which means of communication to choose. However, it is assumed that it will normally be mass media (in particular radio, television, newspapers or social networks).
Considering the fact that the previous chapters have been rather theoretical, we have decided to end the manual with several model situations that can make the often abstract legal regulation more concrete and closer. Ideally, the following examples will illustrate the life situations to which the Act will apply and to which it will not.
The mayor of the municipality XY is involved in manipulating a public contract for the construction of a new multifunctional playground for children. One of the secretaries at the XY municipal office becomes aware of his actions when the necessary documentation is processed. Similarly, the mayor’s neighbour, who overhears his conversation with his wife, learns about the manipulation of contracts. Can any of these entities report the mayor’s Mayor’s actions in accordance with the provisions of the Act??
One of the main conditions for the possibility of a Report is its eligibility, which is guaranteed, inter alia, by the fulfilment of the three basic criteria set out in Chapter 5. The notifier must be a natural person. And the conduct must come to the attention of such a person in the course of work or other similar activity. The first two conditions are met for both potential Whistleblowers. However, the third condition is satisfied only for the Secretary, since the neighbor did not learn of the conduct in connection with his work or other similar activity. In contrast, the Township Secretary will have the opportunity to Report and it is left to her discretion whether to use the Internal Reporting System established within the Township or the Department’s External Reporting System to do so. The neighbour (depending on other circumstances of the case) will have to make do with a traditional notification of suspected offence or a criminal notification to the Police or the State prosecutor’s office.
A diligent law trainee, while drafting documents for one of the firm’s clients, noticed significant discrepancies in the documents provided. Upon closer examination, he concluded that the client had committed several instances of economic misconduct. Aware of the nature of whistleblowing, he wasted no time and used the External Reporting System he reported the conduct. Did he make the right decision?
The Act provides for several exceptions for which the Report cannot be made. In addition to confidentiality, this includes the confidentiality obligations of notaries, public prosecutors, attorneys, but also law trainees. We provide a full list of exceptions in Chapter 5. The new reporting rules thus do not change the confidentiality obligations in relation to clients and this model Report will not be protected, the law trainee has not made the right decision. In addition, the individual has exposed himself the risk of serious sanctions by the Chamber of Advocates.
An employee of a state-owned enterprise has a quarrel with a colleague with whom he has long been at conflict. Following the situation, he decides to retaliate and makes a Report to the Obligated Entity via the Internal Reporting System about the colleague’s unlawful conduct, which he has known about for a long time but has not reported until now. Does the Act provide protection for such a Report and under what conditions?
The employee will also enjoy protection in this case, the intentions and motives of the employee will not be investigated by the Responsible Person. Similarly, the Act does not provide for any time limit to report the conduct in question. However, this aspect only applies provided that the conduct being reported has not resulted in the commission of a criminal offence. In cases where a criminal offence has been committed, it will be necessary to comply with the promptness of the Report (and to other entities) in order to avoid committing the offence of Failure to Report a Criminal Offence under Section 368 of the Penal Code. Thus, provided that all the requirements of the Report are met, the Whistleblower, whose intentions are not of the most honourable kind, enjoys protection. However, situations where – whether in retaliation or for any other reason – a knowingly false Report is filed must be strongly distinguished from this model example. Of course, such a disclosure is not protected, but is instead sanctioned at a minimum as a misdemeanor, which we outlined in Chapter 9
In conclusion, we would like to point out that both the Whistleblower Protection Directive and the newly adopted Act, which will belatedly ensure its proper implementation, are truly unprecedented in scope. Whether you, as a reader, are a prospective Whistleblower, an Responsible Person or an Obligated Entity, of which there will be hundreds in the country alone, you will not escape the new regulations. We will therefore be happy to offer you our advisory services to ensure your compliance with these new rules.
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